The effects of type and dosage of coal slime as reducing agent, reduction temperature and time, and dosage of CaCO3 on direct reduction of limonite containing iron oxides were examined. The iron-containing components in reduced product at different conditions were analyzed. The effect of additive dosage on carbon-containing pellet melt decomposition was also studied. The results show that coal slime C is the best reducing agent. The reduced product with metallization rate of 94.02% is obtained under the conditions of coal slime C 30%, CaCO3 3%, and 1250℃ for 30 min. The iron in product is basically metallic iron with the particle sizes over 30 mm. Moreover, addition of 3% CaCO3 makes slag and iron separate apparently, which is conducive to further separation of reduced product. Therefore, the coal slime can be regarded as a good reducing agent for direct reduction of limonite.